Weighted-average anti-dilution is the modern standard anti-dilution provision in venture-backed preferred stock. It adjusts the conversion price of the preferred series downward when the company issues stock at a lower price, with the adjustment calculated by a formula that weighs the size of the down round against the total cap table to produce a partial (not full) adjustment. It is the more founder-friendly of the two main anti-dilution flavors and the default in modern venture term sheets, sitting between no protection (rare) and full-ratchet (investor-friendly, increasingly limited to distressed situations).
The weighted-average formula: